Venture Capital is a form of private equity focused on small companies. It’s a type of financing that provides startups and early stage companies, who have been identified as having high growth potential, with access to funds from investors known as venture capitalists. Venture Capital investors can either act as individuals, groups, or on behalf of a firm which specialises in venture capital investing. Because investing in startups carries a higher level of risk, investors will typically require a high potential return and look for various protections. This allows venture capital investors to protect their investments and assist the strategic direction of the business. Investors must learn to weigh up the risks of investing in startups with the above-average return on a successful investment.
Venture Capital is becoming increasingly attractive for small businesses looking to raise funds and accelerate their develop and presents a readily available capital raising opportunity.